Only patriots can be good economists.

Politicians in India seem unable or unwilling to understand that the rupee is inversely related to inflation. One fellow said that central banks should not focus solely on inflation but on growth and employment as well, not saying what scores of ministers, costing tens of billions of rupees, were there for. Investment guru and publisher of the Gloom, Boom and Doom, Marc Faber said," They should appoint me to be the chairman of the RBI. If I were the decision maker at the Reserve Bank of India, I would tighten monetary conditions and see to it that the currency stabilizes and there is no inflation. I will also see to it that the fiscal deficit is eliminated. Of course with all these measures the stock market will thank me; I will guarantee you." Mint, 5 August. Therein lies the problem. Politicians are not interested in the economy. On the one hand they are complete sycophants, willing to commit any crime to get noticed by the leader, and on the other they want to hang on to their seats in parliament, no matter how much damage they do to the country. Thus, they have forced the RBI to keep interest rates artificially low, increased taxes to insane levels, reducing growth, and made it almost impossible to import gold, leading to increased smuggling and lower tax collections. Now there is discussion of selling " proxy or quasi sovereign bonds " to foreign investors, such as pension funds, to raise dollars. These bonds will offer up to 9% interest when interest on bank deposits in the US is zero percent. So, while the RBI has cut interest rates to 7.25% in India, which has forced banks to cut interest paid to domestic savers, the government is willing to give money away to foreigners. Foreigners and Non-resident Indians will be able to borrow in the US at 1-2% and get a mind blowing 9% on their money. When these bonds mature in 5 years time a future government will have to find a massive amount of dollars to pay off our debt, again causing stress to our Current Account Deficit. This is economic treason. Some economists are more optimistic, saying that the fall in the value of the rupee will increase exports by making them cheaper. Will it? If you want to buy a fridge or and AC in India you will find dealers selling LG or Samsung in every neighborhood. Will you find an Indian brand? If they are not selling in India what are they going to sell abroad? Like defense economics is for patriots only. Not for traitors.